More than one in two adults are looking at ways to boost their income to help cope with the cost of living crisis.
Research from Canada Life found that 28.9m people (55 per cent of adults) have already implemented, or are looking at plans to increase their income.
The most popular options include selling unwanted belongings (36 per cent), looking for a better paying job (28 per cent) and looking for a second paid job (23 per cent).
However, many are also planning to dip into their personal finances to boost their income. Over a fifth (22 per cent) have, or plan to use, savings or investments; 13 per cent have, or plan to access, their pension savings earlier than planned; while 10 per cent have, or are considering, accessing equity in their home.
A significant number of people are already taking on additional debt, or plan to do so over the next six months.
Around a sixth of respondents (13 per cent) said they had increased their use of credit cards, or were planning to do so, while nearly one in 10 (9 per cent) are planning to increase their overdraft. A further 8 per cent have taken out a loan from their bank, or are looking to do so, while the same amount are looking to borrow from parents or friends.
The vast majority of respondents said they were also cutting back on spending. Seven in 10 respondents (71 per cent) said there were taking more time to consider what they buy while a similar amount (69 per cent) were being thriftier and watching their money. Almost two thirds (65 per cent) are shopping around for the best deals more than they used to.
Canada Life technical director Andrew Tully says: “The cost of living crisis is causing the majority of people to re-evaluate their financial situation, and with inflation set to reach double-digits later this year, we can expect to see more individuals tightening their belts and looking for additional ways to supplement their income.
“However, with the research showing that over one in 10 adults are looking to access their pension early, we, as an industry, need to ensure that these individuals are aware of the tax and cost implications of doing so. Not only will your pension have to stretch further into the future, you are likely to pay tax and you can also trigger the Money Purchase Annual Allowance.
“The use of emergency tax on initial withdrawals may mean people initially receive less than they were anticipating, and have to wait for HMRC to pass on the remainder at a later date. It’s worth keeping mind if you plan on topping up your pension in the future the MPAA restricts the amount you can to £4,000 a year, which includes both you and your employers’ contributions.
“While it’s hard to predict how long inflation will remain high, it’s vital that we encourage people to look beyond the here and now, and look at their finances over the medium to long-term. For those concerned about their financial future, speaking to a financial adviser is a sensible step. These professionals can help give a holistic view of your personal circumstances, ensuring that you are on track to achieve your financial goals.”
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